In March 2025, the Financial Crimes Enforcement Network (FinCEN) issued an updated Geographic Targeting Order (GTO) that drastically lowered the reporting threshold for cash transactions from $10,000 to $200 for money services businesses (MSBs) operating in 30 zip codes across the U.S.-Mexico border. The timing and scope of this change underscores the Trump administration’s aggressive approach to combatting drug trafficking and money laundering by Mexican cartels. It also introduces compliance challenges for remittance operators and is certain to disrupt critical financial flows to families across Latin America.

Under the new GTO, MSBs in targeted regions must file Currency Transaction Reports (CTRs) for any cash-based transactions over $200. This is expected to create a sizable uptick in the number of reportable events for those operating near the border where average remittance amounts often hover between $250 and $500.

As Manuel Orozco, Director of the Migration, Remittances, and Development Program at the Inter-American Dialogue, explained in a recent Integro Talks podcast: “There is a large concentration of migrants in California and other zip codes. The $200 threshold could impact at least 20 percent of outbound money transfers.”

This new requirement brings a heavy operational load to MSBs, particularly those with limited compliance infrastructure, and raises questions about proportionality and unintended consequences.

Although FinCEN’s GTO program dates back to 2014, this most recent update appears aligned with the Trump administration’s broader strategy to designate major drug cartels as national security threats. The administration has stated its intention to redirect compliance and enforcement tools (like FinCEN and OFAC) toward dismantling the financial operations of transnational criminal organizations.

However, Orozco cautioned against drawing technical conclusions from political narratives. “In order to perform an illicit financial transaction using the [new] money transfer rules, it would be very costly. The average money laundering amount is over $50,000. It’s terribly counterintuitive.”

For MSBs operating in the targeted zones (California and Texas), the GTO means more than added paperwork and raises real risk in terms of data privacy concerns with increased customer data capture; operational strain from higher reporting volumes; and, reputational risk in communities that may perceive over-regulation as surveillance.

“We have seen how rapid regulatory change, especially if targeting a specific geography or demographic, can heighten uncertainty and expose gaps in due diligence procedures,” says Alberto de la Portilla, founder of Integro Advisers. A reactive approach is no longer sufficient to keep pace with policy volatility, he says.

While regulators aim to target illicit finance, legitimate remittance recipients (many of whom rely on these transfers as their primary source of income) may be caught in the crossfire. According to Orozco, Latin American countries like Guatemala, El Salvador, and Nicaragua depend on remittances for up to 30% of their country’s GDP. “A decline of 50,000 transactions a month means 50,000 households won’t receive money,” he says. “That’s an impact on the local economy.”

Further, the fear generated by aggressive enforcement can cause migrants to delay or reduce transfers, creating liquidity issues in local markets and exacerbating social inequality.

Looking Ahead: Risk Preparedness in a Politicized Landscape

The 2025 remittance environment is one where compliance and foreign policy are further intertwined. Between tariff tensions, mass deportation orders, and surveillance regulations, MSBs must act quickly to update policies and procedures or risk falling behind. As new regulatory updates emerge, and the administration sharpens its focus on remittance flows, organizations must remain agile and informed.

FinCEN’s $200 reporting threshold is a wake-up call for the remittance industry. For MSBs, this means moving beyond minimum compliance towards strategic risk management. With the right tools, guidance, and foresight, remittance providers can rise to meet this challenge and continue delivering essential services to millions across borders.